Kazakhstan hoping to come to terms over Karachaganak in H1 2011

Kazkahstan hopes to settle all the disputes with Karachaganak Petroleum Operating B.V. (KPO) in the first half of 2011, Minister of Oil and Gas Sauat Mynbayev told during an on-line conference, Bnews.kz reports. With its 1.2 billion tons of oil and condensed gas and 1.35 trillion cubic metres of gas, Karachaganak is one of the largest O&G fileds in the world. Karachagank accounts for 49% of all the gas production and 18% of oil production in Kazkahstan. Disputes with companies involved in the development of the oilfield surfaced late last year. “Our next meeting is scheduled for May 10. Now the talks have been intensified. Hopefully, we will reach some agreement in the first half of the year (…) I cannot comment any further”, Minister Mynbayev said. According to the Minister, “all the parties involved are fully aware of what we want (…) It seems we are not going to turn to arbitration”. The Minister believes the contract will not be terminated: “(…) this issue is not that thorny. I believe eventually we will come to terms”. Earlier Timur Kulibayev, Chairman of the Board of Directors at KazMunaiGaz National Oil Company, told journalists that the Company wanted to purchase up to 10% in the Karachaganak project. “Currently, there are no official agreements on KMG’s participation in the project”, Minister Mynbayev said. Karachaganak Petroleum Operating (KPO) is a consortium of companies to develop Karachaganak oilfiled. The consortium includes BG Group, Eni (32.5% each), Chevron (20%) and LUKOIL (15%). KPO operates in accordance with a PSA signed with the Kazakh Government in November 1997. According to the PSA, the consortium shall be operating the project up to 2038.